Car makers and engineering firms help drive European stocks higher

Europe’s main markets rebounded on Friday as automotive and engineering firms helped lead the way.

Aston Martin and Rolls-Royce were among the top performers in London, helping to offset shakiness among utilities firms.

The FTSE 100 ended the day up 119.2 points, or 1.69%, at 7,159.01.

“European markets look set to finish a negative week on an upswing as investors veer between optimism over a soft landing for the global economy, against concerns that upcoming earnings could well see significant downward revisions,” commented Michael Hewson, chief market analyst at CMC Markets UK.

“Friday’s rebound has been led by the DAX with strong gains for the likes of Mercedes Benz and BMW, while in the UK Aston Martin shares have surged after the business secured a funding deal of £335m from the Saudi Arabia sovereign wealth fund.

“Rolls-Royce shares are also having a decent day, top of the FTSE 100, perhaps due to the upcoming Farnborough Air Show next week, which might result in some decent order flow.”

The German Dax increased 2.79% by the end of the session while the French Cac improved by 2.11%.

In the US, the key markets climbed at the start of the session as they were emboldened by positive sentiment in Europe and better than expected retail figures for June.

Meanwhile, sterling made minor inroads into the dollar late into the session, after the US currency hit another 20-year high.

The pound was up 0.07% against the dollar at 1.186 but was 0.02% lower against the euro at 1.175 at the close.

In company news, mixer manufacturer Fever-Tree slid in value after it slashed its profit forecasts for the year following the impact of rocketing costs and labour shortages.

The tonic specialist told shareholders that port congestion and a dearth of staff in the US had also weighed on production over the past six months.

Shares were 332.5p lower at 866.5p at the end of the session.

BT shares slipped as investors in the telecoms giant digested reports that major UK rival Virgin Media 02 is plotting a roughly £3 billion move to buy TalkTalk.

Virgin Media O2, which is backed by Telefonica and Liberty Global, would bolster its position as one of BTs biggest challengers if the bid is accepted. BT closed the session 14.55p lower at 175.65p.

Elsewhere, Burberry declined after the fashion brand said continued Covid-19 restrictions in China held back its recovery.

Shares fell 62p to 1,586.5p after it said first-quarter sales dipped 35% in the country – a vital market for its clothes.

The price of oil bounced back but is still on course for a fifth successive weekly decline following demand concerns.

Brent crude increased by 2.59% to 101.67 US dollars per barrel when the London markets closed.

The biggest risers in the FTSE 100 were Rolls-Royce, up 4.47p at 89.79p, Airtel Africa, up 6.9p at 156.5p, JD Sports, up 5.4p at 129.1p, Rentokil, up 20.9p at 512p, and Berkeley, up 151p at 3,949p.

The biggest fallers of the day were BT Group, down 14.55p at 175.65p, Burberry, down 62p at 1,586.5p, United Utilities, down 35.5p at 1,016p, Severn Trent, down 83p at 2,775p, and Admiral, down 51.5p at 1,882p.